ISLAMABAD (Dunya News) – Pakistan’s overall energy-sector circular debt has risen to Rs5.286 trillion, reflecting continued financial pressures in the country’s power and gas sectors.
According to sources, the circular debt in the gas sector stands at Rs3.611 trillion, while the power sector’s circular debt has been recorded at Rs1.675 trillion.
The figures show that the gas sector accounts for a significantly larger share of the country’s total energy-sector circular debt than the electricity sector.
The International Monetary Fund (IMF) has said Pakistan’s energy sector continues to face substantial financial pressures and stressed the need to accelerate reforms aimed at improving financial sustainability.
According to the IMF, timely tariff adjustments are essential to contain the accumulation of circular debt in the energy sector. It has also called for reducing losses and improving the operational efficiency of energy-sector entities.
The global lender said reducing the flow of circular debt in the power sector remains a major challenge for Pakistan. It has also urged the government to continue cost-based tariff adjustments in the gas sector.
The IMF warned that structural weaknesses in the energy sector pose a risk to Pakistan’s fiscal stability. The government, meanwhile, has committed to further reducing the flow of circular debt in the power sector during the current fiscal year.
According to the IMF, ongoing energy-sector reforms are aimed at reducing losses and putting both the electricity and gas sectors on a more financially sustainable footing.